Is financing a single-family house feasible for us?

Hello!

Shortly before the start of construction, we/I somehow get cold feet about whether we might be overextending ourselves financially with the building project. What is your assessment?

Our data:
Net income (both civil servants): 2500€ each, so 5000€ total
Children planned in about 5 years

Equity: Land: 180,000 paid off out of 250,000
Other equity: 20,000
Construction costs: estimated 470k
Loan amount would therefore be 520k.
Planned installment is 1800€

We are planning 160 sqm living space + basement
We want to put quite a bit of our own work into it.

Actually, construction is to start in 4 weeks. The loan contract is also ready for signature.
My wife sees no problem at all and comes up daily with new special requests.
She thinks I am too anxious.
I would like a few neutral opinions!

I might possibly lower the monthly installment and plan for more special repayments instead, so you are more flexible if your income decreases, for example, due to parental leave, childcare, illness, etc.

Thank you for the note! We can change the rate for a small fee, especially for [Elternzeit]. We don't have much leeway if we want to be finished by retirement.

Our situation is very similar, the same loan amount. We went through with it. In our case, it is handled through a [Bauträger]. I can only confirm the experience with the special requests. A sufficient buffer should be planned here.

Yes, what is there to say now?
Installment to income, currently ok.
Installment to income with children? Extremely questionable. And don't forget, the installment adjustment is an option where the bank still checks whether it agrees to it afterward.

Construction costs could be accurate but might also be tight depending on the region and equipment.

Thanks already for your hints!

So my concerns are that we don’t have a fixed price and there isn’t much room to increase the loan amount anymore. Since we are building ourselves, we could really only estimate the costs very roughly.

The construction site is west of Munich, so not cheap.

And the equipment is the next sticking point. My wife wants everything and doesn’t want to give up anything. A few things could of course still be changed during the construction process, like laminate instead of parquet. But a lot is already decided quite early, like the cellar, chimney, huge brick garage (8m×7m)...